Suppose that statistical analysis shows that the demand function for Brazilian coffee in South Africa is as follows:

Q_D= 7.5 - 3 P + 0.8 I + 2 P_I- 0.6 P_S+ 0.12 A

where Q_D= quantity demanded of your company's coffee in South Africa, in millions of pounds per year

P = price of your coffee, in rand per pound

I = disposable personal income, in trillions of rand per year

P_I= price of imported Indonesian coffee, in rand per pound

P_S= price of sugar, in rand per pound

A = advertising for Brazilian's coffee, in millions of rand per year

The values for the variables above are I = R2.5, P_I= R1.80, P_S= R0.50, and A = R10.The supply function for Brazilian coffee is as follows:

Q_S= 14 + 2 P - 8 W - 1.5 P_EU- 2 P_E

where Q_S= quantity supplied of your company's coffee in South Africa, in millions of pounds per year

P = price of your coffee, in rand per pound

W = wage of coffee workers in Brazil, in rand per hour

P_EU= price of coffee in the European Union, in rand per pound

P_E= expected price of Brazilian coffee next year, in rand per pound

The values for the variables above are W = R0.75, P_EU= R3.60, and P_E= R4.30.

a)Find the equilibrium price and quantity. (6)

b)If the current price is R4.25 a pound, what disequilibrium situation would exist?(3)

c)How large is the disequilibrium (3), and what would happen in this market to eliminate the disequilibrium? (3)